AVIATIONTRENDS Statistics, analysis and information from the swedish transport agency 2009

Transcription

1 AVIATIONTRENDS Statistics, analysis and information from the swedish transport agency 2009

2 facts 28.1 million passengers in scheduled and charter traffic at Swedish airports, an increase of 3.4 per cent million passengers in international traffic, an increase of 5.2 per cent, 6.7 million passengers in domestic traffic, a decrease of 2.2 per cent Number of passengers per flight was The average amount of passengers on domestic flights was 50.1, and the corresponding number for international traffic was 87.6 per flight. Air-freight to and from Swedish airports during 2008 amounted to just over 185,300 tonnes, a decrease of 13.4 per cent compared with International freight dropped by 13.5 per cent to 180,700 tonnes. Domestic freight which accounted for 2.5 per cent of the total freight volume, declined by about 9 per cent. There were 392,910 landings which was almost unchanged as compared with The number of landings in scheduled and charter traffic was 256,604, corresponding to an increase of 2.1 per cent compared with Stockholm-Arlanda handled 18.1 million passengers, an increase of 1.3 per cent compared with In absolute numbers, the increase was greatest at Stockholm-Skavsta with 485,000 more passengers during During 2008, scheduled and non-scheduled commercial traffic was carried out from 41 airports in Sweden. Editor and publisher: Jean-Marie Skoglund, jean-marie.skoglund@transportstyrelsen.se Telephone Transportstyrelsen, SE Norrköping Sweden Translation: Per-Göte Lundborg

3 AVIATION TRENDS FOREWORD During 2008 the air transport market was affected by the financial crisis and the downturn of the global economy. Air carriers and aircraft manufacturers were compelled to adjust their activities and make substantial savings in order to meet the decreasing air traffic demand. Sweden is in the forefront of flight safety and its standards meet the level of safety standards of other comparable countries. Aviation trends describes the air transport market in Sweden and its development during This report gives interested parties an overall picture of different topics that marked the year As of 1 January 2009 the former Swedish Civil Aviation Authority is part of the Swedish Transport Agency. The Agency is not only responsible for aviation but also has overall responsibility with regard to rail, maritime and road transports. Aviation issues are now being managed by the Civil Aviation Department, one of the departments in the Transport Agency. One of the main tasks of the Agency is to provide for a high level of safety through information, regulation, approval and oversight. Lena Byström Möller Director, Civil Aviation Department CONTENT The history of domestic aviation in Sweden 4 Domestic travel in Sweden 10 The national survey of travel habits (domestic) 13 Focus on domestic ticket prices 16 The market after deregulation 18 Flying is dangerous that s why it s so safe! 22 Swedish international air services have changed 26 From Mallorca to Ho Chi Minh City 28 The national survey of travel habits (international) 30 Swedish air transport charges 33 Slots time windows 36 Aviation s environmental challenge 40 The role of civil aviation in Swedish national contingency planning 44 SNAM a unique national resource 47 Fees for general aviation 50 Statistics 52

4 4 AVIATION TRENDS 2009 Jean-Marie Skoglund, THE HISTORY OF DOMESTIC AVIATION IN SWEDEN Domestic air transport entered relatively recently Domestic network development into Sweden s transport system compared with trains and buses. On the whole, air transport accounted for a rather minor part of the total transport sector un Kiruna 1990 Kiruna til the 1980s. The largest increase took place during that decade (mainly within the domestic area) but Luleå Luleå the 1990s were characterised by an upheaval within Swedish domestic aviation and for the first time there was a downward trend, largely connected with the economic stagnation in the early 1990s. the beginning of domestic aviation Domestic air transport in Sweden began in the early 1900s via aerial newspaper and mail services, similar to the development of air transport in most other countries. In the 1930s AB Aerotransport (ABA) 1 started domestic passenger transport on the routes Stockholm Visby, Göteborg Malmö and Stockholm Malmö. When Stockholm-Bromma Airport was established it became possible for ABA to develop Sweden s domestic air transport system; however, during WW II it was at a standstill. The early 1950s saw a build-up of passenger air traffic from the very low activity in the years after the war. Passenger transport was initially a complement to the transport of newspapers and mail, and it was not until the late 1950s that passenger travel became dominant, both in significance and volume. During the 1950s domestic air transport expanded with new destinations, such as Kronobergshed, Kalmar, Ronneby, Jönköping, Sundsvall-Härnösand, Nordmaling (Umeå), and Luleå. Linjeflyg transported 24,800 passengers in 1957, growing to 189,558 over the following year. The 1960s saw more new destinations: Ängelholm, Kristianstad, Borlänge, Umeå and Skellefteå. In the mid-60s Linjeflyg served 15 Swedish destinations from Stockholm-Bromma; SAS served four: Malmö, Göteborg, Luleå and Kiruna. Göteborg Malmö 2000 Stockholm Kiruna Stockholm Göteborg Luleå Malmö 2008 Stockholm Kiruna Stockholm Luleå Göteborg Göteborg 1 AB Aerotransport (ABA) was founded in 1924 and was the first governmentowned airline that had a certificate for scheduled air services within Europe and domestically. ABA was reorganized in 1948 and integrated with SILA (Swedish Intercontinental Air Services), a privately owned company supplying intercontinental air services. The new airline was the basis for the establishing of SAS, and the operator certificate was transferred to SAS. Malmö Malmö

5 AVIATION TRENDS From the 1950s to the end of the 1970s Swedish domestic aviation was characterised by a constant increase in the number of passengers flown, and new routes being opened. Nevertheless, despite the positive development, air transport only accounted for a small part of the country s total transport sector, and was for many years considered a businessman s mode of transport. air transport becomes popular The breakthrough for domestic aviation came in the 1980s, when Jan Carlzon, appointed MD of Linjeflyg in 1978, introduced a market orientated strategy for the airline. With its motto The whole of Sweden at half the price Linjeflyg began a venture to bring new passenger categories to the domestic air transport system: pensioners, families with children and young people; groups which had previously accounted for only a fraction of the total domestic volume. As part of this strategy, Linjeflyg introduced a pricing policy of favourable prices and discounts in order to attract these new travellers. One example was the so-called One hundred crowns ticket, 2 aimed specifically at young people to make them regard air transport as a natural mode of travel. In addition to the price policy Linjeflyg also extensively increased the number of flights in its network. This new deal resulted in a pronounced increase in domestic passengers already in the first year Linjeflyg expanded by 44 per cent; the special deal for young people alone had recruited about 125,000 new passengers. 3 The new domestic air transport system had been transformed from a business to a people s mode of transport. During the latter part of the 1980s domestic air transport expanded by 8.7 per cent annually, 4 which meant that, for the first time, aviation took up the fight against the car and the train. In addition to a new price strategy and a deliberate marketing effort aimed at the public at large, the centralization of domestic aviation in 1983 to Stockholm-Arlanda was a defining factor in the explosive development of domestic aviation in the 1980s. The concentration of domestic air transport at Arlanda was, together with Linjeflyg s new strategy, the most important prerequisite for the development of domestic aviation. With Arlanda as the hub, domestic airlines developed a well-functioning hub-and-spoke system. For SAS and Linjeflyg in particular, this concentration gave favourable coordination and efficiency benefits in respect of personnel as well as aircraft fleets. Together with the regional airlines, a far-reaching coordination took place of such aspects as marketing, price policies, timetables and ground handling, in order to facilitate domestic as well as international air travel. A significant change resulting from the concentration at Arlanda was the reduction in transverse connections between regions in Sweden, which decreased drastically during the 1980s. Economic development in the 1980s When studying the expansion of domestic aviation in the 1980s it is impossible to ignore economic development during that period. Following the recession in the 1970s, Swedish industry and the economy began to stabilize, partly due to the devaluation of the Swedish currency in 1982 and partly as a result of a general global trade boom. Swedish society was thus characterized by a substantial upward economic trend, increased incomes and purchasing power, FigurE 1 Passenger development Financial crisis 2008 GNP 20,000,000 International Domestic GNP Low-cost carriers established in Sweden 3,500,000 3,000,000 15,000,000 2,500,000 9/11 2,000,000 10,000,000 5,000,000 The people s mode of transport Concentration of domestic traffic to Arlanda The Gulf war Introduction of VAT on travel Sweden becomes a member of the EU Deregulation of domestic air traffic 1,500,000 1,000, , The introduction of the 100-crowns ticket was a strategic move to make young people regard flying as a natural mode of transport. 3 Carlzon, Jan, Riv pyramiderna! Bonniers, Stockholm 1985, pp Airport statistics , LFV Norrköping. On the Stockholm Göteborg route the number of passengers doubled between 1984 and 1989, from half a million to one million passengers.

6 6 AVIATION TRENDS 2009 unemployment reduced to an all-time low, and huge profits for Swedish industry. The expansion of aviation during the 1980s was in many respects dependent on the economic situation described above. Domestic aviation came to play an increasingly important role in the traffic services; the period shows an average annual growth of 10.3 per cent. 750,000 passengers were transported in 1965; yet by 1988 the number was more than 8.5 million. 5 The variables explaining the increase in air traffic during the 1980s are primarily increased incomes and more business journeys. Among the most important reasons for this were the relocation of public offices from Stockholm to regional centres such as Umeå, Sundsvall-Härnösand, Borlänge-Falun, Karlstad, Örebro, Linköping, Norrköping, Jönköping, Växjö, and others. The decline in the early 1990s The peak in domestic aviation came in 1990 when 8.6 million passengers were flown. The subsequent years showed a downward trend for the first time; between 1990 and 1991 domestic aviation dropped by 2.1 million passengers, 6 or 13 per cent. Between 1991 and 1996 the numbers fell every year except for Apart from the downward economic trend the Swedish Parliament introduced a 12 per cent VAT rate on travel, exacerbating the negative trend in domestic air travel. The downward trend ended in 1996, when for the first time in five years there was an increase, albeit small, in domestic air traffic: 0.4 per cent. In 1997 and 1998 however, there was a large increase in passengers: 10.5 per cent. The upward trend continued until the year 2000, when there was a significant reduction, similar to The situation stabilized in Deregulation of domestic aviation One of the most important institutional changes in the national aviation sector was the deregulation of domestic aviation in Until then the market was characterized by SAS and Linjeflyg enjoying a unique position with a domestic market share of more than 95 per cent. The dominance of these two airlines was based on: A monopoly position in the domestic market. SAS became duty bound and was given sole rights to uphold certain routes: Stockholm Kiruna, Stockholm Luleå, Stockholm Göteborg, and Stockholm Malmö; the remaining routes were given to Linjeflyg as sole rights. By combining price regulation and establishment control, the government granted exclusive rights for domestic air services to SAS/Linjeflyg. This meant that SAS/Linjeflyg would serve routes (albeit operated by Swedair) that were weak from a business economics viewpoint. The government applied cross subsidisation in the domestic aviation sector to the tune of about SEK 30 million annually. SAS controlled, via Linjeflyg and Swedair, both pricing and scheduling. SAS/Linjeflyg was a body to which proposed applications for air operation certificates were referred for consideration, thereby being given the opportunity to influence whether new operators were to be granted access to the market.

7 AVIATION TRENDS Prices and capacity level were determined in consultations between the Swedish Civil Aviation Administration and the Swedish Ministry of Transport and Communications, as it was known then. In the beginning of the 1990s a wave of liberalisation swept through Europe, especially within civil aviation. The liberalisation had started in England during the 1980s and was accelerated by intensification of European co-operation (the Rome Treaty). The aviation market thus became at par with other sectors. 7 At the national level in Sweden the establishing of Transwede Airways speeded up the liberalisation of domestic aviation. Transwede applied for an air operator certificate in early 1989 to serve several domestic destinations, thereby challenging the prevailing system. Similar applications came from Malmö Aviation and Nordic East Airways, as well as from smaller regional airlines. Deregulation of domestic aviation in Sweden took place in two steps. In its bill 1990/91:87 the government suggested a partial deregulation where future competition would be allowed between SAS and Linjeflyg. This meant that the government rejected the view of the competition committee (SOU 1990:58), which had suggested that only those routes with an annual volume of 300,000 passengers should be subject to competition. The government s reason for its proposition was the lack of capacity at Stockholm-Arlanda Airport, which would make total deregulation more difficult; however, the basis of this reasoning would change drastically. Firstly, domestic air traffic dropped by 20 per cent between 1990 and 1991 which meant that the lack of capacity at Stockholm-Arlanda Airport was no longer a valid argument; secondly, SAS acquired Linjeflyg in 1992, thereby obtaining total market dominance (in principle). The merger between SAS and Linjeflyg speeded up the deregulation process and the government decided to deregulate domestic aviation as from 1 April This resulted in the following changes for the Swedish air transport market: The sole right and right of precedence for SAS/Linjeflyg came to an end. The air transport market became open to all Swedish airlines meeting the safety standards. Price and timetable regulation were repealed. The government may have granted exemption from open competition for reasons of regional politics. 8 Development after deregulation There are several events marking Swedish domestic aviation after deregulation. Firstly, the demand for domestic air travel has in general fallen since 1992, despite deregulation and increased competition; in fact, during the period the reduction equalled two million passengers. Development after 1992 is also characterized by Sweden creating one of Europe s most liberalised domestic markets. A sudden result of deregulation was stimulation of the establishment of new airlines despite the considerable drop in demand in the early 1990s. Competition was striking on the densest routes, with resultant lower prices. Deregulation has also produced overcapacity, market upheavals in the form of bankruptcies, acquisitions and mergers, and for most of the thinner routes, it has produced higher ticket prices instead. SAS market dominance has become stronger after deregulation, partly with the acquisition of Linjeflyg in 1992 and partly via the co-operation agreement with Skyways in Together, SAS/Skyways today carry 65.6 per cent of the domestic passengers in Sweden. In general ticket prices have increased since deregulation; however, on certain routes such as Stockholm Göteborg, Malmö Stockholm, Umeå Stockholm, and Luleå Stockholm, ticket prices have fallen thanks to low-cost carriers. On routes served by only one operator there has generally been a steady increase in ticket prices. When air travel organisers started serving a number of destinations from Stockholm-Bromma at the beginning of the new century, ticket prices dropped somewhat. Other circumstances that have influenced the downturn and stagnation of domestic air travel are: the introduction in 1992 of VAT on passenger transport, new safety requirements, improved alternative modes of transport, such as motorways, high-speed trains and a train connection to Stockholm-Arlanda Airport. The absence of more operators, in particular low-cost carriers, has also contributed to the stagnation. Finally, an increased environmental awareness has affected the development. 5 Airport statistics 1965 and 1990, SCAA (LFV). 6 During the period the number of domestic passengers dropped by 25 per cent. Airport statistics, , SCAA (LFV), Norrköping. 7 Art The Rome treaty provides that free movement for transport services shall be regulated by the rules in the section for transport (art. 70). Art. 74 specifies that member states shall reach the treaty target within the framework of a common transport policy. 8 Bill 1991/91:100, app. 7, p. 104.

8 8 AVIATION TRENDS 2009 Table 1 Domestic passengers percentage change Airport and difference, passengers in thousands Hemavan +14 Bromma +725 Oskarshamn +4 Pajala +1 Arvidsjaur +7 Kiruna +29 Skavsta +1 Umeå +91 Torsby +0,4 Luleå +19 Ängelholm +5 Visby 0 Lycksele -1 Vilhelmina -1 Skellefteå -19 Ronneby -24 Landvetter -178 Malmö -169 Örnsköldsvik -24 Östersund -67 Sveg -1,5 Gällivare -12 Arlanda Kalmar -64 Hagfors -1,3 Halmstad -54 Växjö -64 Sundsvall -165 Storuman -7 Trollhättan -37 Mora -8 Jönköping -54 Säve -0,9 Kristianstad -81 Linköping -28 Borlänge -54 Karlstad -116 Kramfors -48 Örebro -37 Västerås 32 Norrköping % -6 % -8 % -11 % -13 % -14 % -14 % -15 % -23 % -24 % -28 % -30 % -33 % -34 % -35 % -37 % -38 % -43 % -49 % -50 % -57 % -58 % -66 % -66 % -66 % -76 % -83 % -96 % -97 % 28 % 24 % 17 % 15 % 13 % 13 % 2 % 1 % 0 % 47 % 74 % -100 % -50 % 0 % 50 % 100 % 150 % 200 % 250 % 300 % 350 % 332 %

9 AVIATION TRENDS Table 2 Development of the domestic air transport market Year Events 1944 Privately owned SILA (the current parent company of SAS) is granted the right to operate scheduled air transport; before this the Government-owned company AB Aerotransport (ABA) had a monopoly SAS is formed by ABA and its corresponding Danish and Norwegian companies (DDL and DNL, respectively) ABA and SILA merge Linjeflyg is formed as a daughter company to SAS and given the routes not desired by SAS A political road traffic decision, involving a slow deregulation of the haulage industry; it went on until A political air traffic decision (follow-up of a decision from 1963, which was of only minor importance to air traffic) Swedair is formed (fusion between a private and a Government-owned company; the Government had 50 per cent, ABA 25 per cent, Linjeflyg 25 per cent) A political road traffic decision Malmö Aviation is formed (flying school and air taxi) A political air traffic decision (follow-up of a decision from 1979, which was of only minor importance to air traffic) Transwede is formed, initially to serve the charter market A political traffic decision (SAS and Linjeflyg still to have a favourable position) Linjeflyg acquires the Government s share in Swedair and makes it a subsidiary company. A competition committee was appointed to review the protected sectors in particular, i.e. in the transport sector, priority to domestic aviation. Proposal: Open competition on routes carrying more than 300,000 passengers annually, i.e. the 8 to 10 densest routes SAS sells its share in Linjeflyg to Bilspedition Jan Riksdag decision: Competition between SAS and Linjeflyg only (lack of capacity at Stockholm-Arlanda Airport). 11 Feb SAS bids for 51 per cent of Linjeflyg. 29 Apr Bill 91/92:100 which carried the intention to deregulate; SAS s acquisition of Linjeflyg; A 20 per cent drop in domestic passengers between 1990 and 1991 which reduced the pressure at Stockholm-Arlanda Airport. 1 July The domestic aviation market is deregulated. Transwede starts scheduled air transport in the summer. Malmö Aviation starts scheduled air transport between Stockholm-Bromma Airport and Malmö Airport. Skyways is formed via a merger between Salair and Avia and becomes Sweden s biggest regional airline The concession conditions for SAS are changed, leading to a situation where the airlines can themselves set the ticket prices, but with an obligation to apply to the LFV/Luftfartsverket SAS signs a co-operation agreement with Skyways in June. Nordic European starts scheduled air transport between Östersund and Stockholm in November Sep Norwegian operator Braathens takes over half of Transwede s scheduled air traffic Apr Complete cabotage, i.e. foreign carriers can start domestic traffic in Sweden. Braathens acquires the remaining part of Transwede s scheduled operations in December SAS acquires 25 per cent of Skyways. Braathens acquires Malmö Aviation in September Konkurrensverket (the Swedish Competition Authority) decides on a penalty of SEK 100 million for SAS because the carrier has abused its dominating position by its application of EuroBonus in the domestic market. The authority also decides to forbid SAS to apply EuroBonus on those routes where there is competition from other carriers. SAS appeals the decision Gotlandsflyg AB, an air travel organization, starts serving the Stockholm-Bromma Airport Visby Airport route. Oct The Swedish Market Court decides that SAS must pay a fine of SEK 50 million because it has abused its dominant position, and that SAS should cease to apply the bonus programme on routes where there is competition Low-cost carrier Swe Fly starts serving Kalmar and Ronneby Low-cost carrier Nordic Airlink (later FlyNordic) starts domestic operations in January. FlyMe starts domestic operations in March The Swedish Civil Aviation Authority is formed by separating the authority departments from LFV/Luftfartsverket. SAS introduces a new concept: The new domestic ticket at SEK FlyMe goes into liquidation. Sterling enters the Swedish domestic market Sterling goes into liquidation on 29 October Jan The Competition Authority cancels a previous decision from 2001, which was aimed at stopping SAS s bonus programme on competing domestic routes. The Authority may, however, reinstate the 2001 decision if SAS is found to misuse its dominating position to reintroduce the Eurobonus programme on domestic routes. Feb SAS decides to reorganize; the existing split between SAS Denmark, SAS Norway, and SAS Sweden is cancelled.

10 10 FLYGTENDENSER 01/2009 Helen Jakobsson, domestic travel IN SWEDEN It is a well known fact that the major volume of domestic air travel is found in southern Sweden, but what is the overall picture if we introduce the population factor? Is domestic air travel a mode of transportation in sparsely populated areas today, or do we only find travellers on routes between metropolitan areas, where the major airports are situated? In this article we map Swedish domestic aviation against the background of ongoing discussions about its future. Transport politics and debates Politics is often a case of balancing different interests. Sometimes there are synergies between them, but more often they are conflicting, and politicians are forced to balance improvements within one political area against deterioration within another, as a consequence of the same action. In its transport bill Modern Transports, 1 the Government takes the view that the transport system should aim at counteracting the drawbacks created by long distances, domestically as well as internationally. At the same time a conflict could arise between the regional development politics, of which transport politics is a part, and certain environmental goals. 2 The domestic air transport sector has come into focus in the present discussions on the environment. Even if the opinions regarding the future of domestic air transport vary between different interest groups, most of them are in agreement that we can see a development where train travel is taking over from air travel over short distances. Certain operators are even of the opinion that the government should regulate which routes should be served by air, and that air transport should above all be used in regions where other modes of transport would mean a substantial time loss, for example in the northern regions of Sweden. At the same time, train capacity is limited and cannot satisfy the demand for transport on the densest domestic routes. Air travel between the Swedish metropolitan areas Domestic air travel in Sweden is almost invariably concentrated to and from Stockholm, that serves both as a final destination and departure point for onward travel, domestic or international. In 2007, a total of 6.9 million domestic pas- 1 Modern transports. Bill 2005/06: See for example the Swedish Environmental Protection Agency: Environmental goals and other desiderata, report 5747, August 2007.

11 FLYGTENDENSER 01/ sengers travelled by air, with 6.7 million of them arriving or departing from Stockholm (Bromma Airport or Arlanda Airport). The two densest domestic routes, Stockholm Göteborg and Stockholm Malmö, carried 2.3 million passengers, i.e. about 35 per cent of all domestic air travel. The background to these volumes is the structure of the population; more than half live in three districts in southern Sweden: Stockholm, southwest Sweden (Västra Götaland) with Göteborg as a hub, and Scania (Skåne) in southernmost Sweden with Malmö as a hub. Figure 1 shows the population and density in From the table it is obvious that the three districts mentioned have the most people and the highest density. Figure 1 Population and density 2006 Population 2,500,000 2,000,000 1,500,000 1,000,000 Inhabitants per sq.km see scale on right Population see scale on left Inhabitants per sq.km inhabitants per district, and the districts are then placed in order of preference. 4 The national average is set at 100. The graph clearly shows that domestic air travel is largest in those districts furthest away from Stockholm and the district of Gotland (an island in the Baltic). This is due to the fact that there are fewer alternative modes of transport in these regions compared with others, and that the travel time to Stockholm would be much longer with other modes of travel than by air from these districts. A trip from Arvidsjaur to Stockholm using bus and train takes hours, compared with two hours by air. The number of journeys per inhabitant in the districts where the densest domestic air routes are found, i.e. Stockholm, Västra Götaland and Skåne, are very close to the national average. These regions have a much more developed rail infrastructure, and the time gained by using air travel instead of train travel is considerably less than when travelling from the northernmost parts of Sweden. As an example, the train journey from central Göteborg to the centre of Stockholm takes an average of four hours 5 compared with a flight time to Stockholm-Arlanda Airport of about one hour; however, check-in time, security procedures, and travel to and from the airports must be added to this time, which reduces the time gained by air travel on this route. 500, Figure 2 Domestic air journeys per inhabitant and district; national average index = Jämtland County Norrbotten County Västerbotten County Dalarna County Västernorrland County Source: SCB/Statistics Sweden Gävleborg County Värmland County Gotland County Kalmar County Kronoberg County Air trips per inhabitant The table above shows that the densest domestic air routes are found in southern and central Sweden. In order to map regional travel tendencies, it is necessary to study air travel in relation to population in the respective region. Figure 2 shows the order of preference for domestic flights per inhabitant in the Swedish districts. It is based on a survey of travel habits made by SIKA (the Swedish Institute for Transport and Communications Analysis) and the transport authorities during 2005 and The respondents were asked questions about their travel habits, including flights. The answers are then related to the number of Jönköping County Örebro County Uppsala County Östergötland County Södermanland County Västmanland County Blekinge County Halland County Västra Götaland County Skåne County Stockholm County Västerbotten Norrbotten Gotland Blekinge Kronoberg Skåne Stockholm Västernorrland Jämtland Uppsala National average Halland Västra Götaland Jönköping Västmanland Gävleborg Kalmar Dalarna Värmland Östergötland Örebro Södermanland Sources: SIKA and SCB/Statistics Calculations from the Swedish Transport Agency 3 Travel habits are delat with in more detail in the investigation on national travel habits. 4 Estimates by the Swedish Transport Agency. 5 Travel time depends on choice of departure.

12 12 AVIATION TRENDS 2009 The smallest amount of domestic air travel is undertaken by those living in the districts closest to Stockholm. There are few air connections, and an air journey would in practice take longer than travelling by train. Figure 3 shows (graphically) the air travel habits within Sweden. Figure 3 Domestic air journeys per inhabitant in Swedish districts in relation to the national average Much above the average Somewhat above the average Somewhat below the average Much below the average Sources: Lantmäteriet - National Land Survey of Sweden, SIKA - Swedish Institute for Transport and Communications Analysis and SCB/Statistics. Processed by the Swedish Transport Agency The future of domestic aviation In the ongoing environmental discussion, the question of the future of domestic aviation in Sweden has arisen. Certain participants have even advanced the opinion that there should be no domestic air traffic at all south of Sundsvall. The fact that 35 per cent of today s domestic travel takes place between the metropolitan areas is sometimes brought up as a sign that air travel is used more by those living in areas where there is a larger selection of modes of transport than by those living in areas where the alternatives are scarcer. In order to map the regional distribution of air travel, Figure 3 shows the number of air trips in relation to the population in the Swedish districts. It also shows that domestic air travel is used more by people living in districts far away from Stockholm, or with limited geographical access, although not so far (e.g. Gotland) compared with those living in areas closer to Stockholm. It conveys the picture that today, domestic air connections are more important to the population in remote areas, than to the metropolitan population, a picture which will most probably be reinforced over the next few years, given the present political direction. Concurrently with the infrastructure development in northern Sweden which will reduce train journey time, trains could become an alternative mode of travel to and from the northern areas of the country. The Botnia railway, extending to Umeå, will be inaugurated soon which means that the journey from Stockholm to Umeå will be reduced to about six hours. Consequently the time gained may result in a reduction in air travel from the northern coastal areas of Sweden in the future.

13 FLYGTENDENSER AVIATION TRENDS 01/ Håkan Brobeck, the national survey of travel habits Domestic travel over distances > 300 km Between the autumns of 2005 and 2006, Statistics Sweden performed a survey of national travel habits in response to a request from the transport authorities and the Swedish Institute for Transport and Communications Analysis (SIKA). The survey was carried out every day, involving a total of 27,000 telephone interviews and covering all modes of travel. In respect of air travel, the long-distance journeys were of most interest, especially those of 300 km or more, and it is the result of this part of the survey which is presented here (unless otherwise indicated). Distribution of modes of transport The car dominates long-distance travel in Sweden, accounting for 60 per cent of all journeys. Train travel is somewhat more common than air travel, but conversely, in terms of passenger-kilometres, these are considerably higher for air than train travel; however, the car is in the lead here, with 55 per cent of passenger-kilometres travelled. Trip lengths Trains and buses have a proportionately even share of the journeys in the different categories of trip length, although in the case of air and car travel, there is a difference. The car s share decreases as the journeys become longer, but for air travel, the opposite is true. When it comes to journeys longer than 800 km, aviation accounts for 49 per cent. During the period in question, there were 28.8 million domestic one-way trips covering distances of 300 km or more. Air travel accounted for 4.2 million trips, or close to 15 per cent billion (14,100,000,000) passenger-kilometres were accumulated (20 per cent by air), indicating that journeys by air were on average longer than journeys by other modes of transport. Below is a report on what characterises personal air travel in comparison with other modes of transport. Figure 1 Percentage of number of journeys, passengerkilometres (respectively) per mode of transport 70.0 % Figure 2 Number of journeys distributed by mode of transport and trip length % 90.0 % 80.0 % 70.0 % 60.0 % 50.0 % 40.0 % 30.0 % 20.0 % 10.0 % 2.3 % 2.5 % 14.2 % 7.5 % 73.5 % 1.3 % 9.3 % 16.9 % 7.6 % 64.9 % % 19.8 % 17.7 % 5.4 % 56.0 % 1.3 % 33.4 % 18.4 % 5.5 % 41.4 % % 25.4 % 12.3 % 4.6 % 56.2 % 1.9 % 48.7 % 18.2 % 3.6 % 27.6 % 60.0 % 61.1 % 55.4 % of number of journeys 0.0 % km km km km km 800+ km 50.0 % of passenger-kilometres Air Train Bus Car Other 40.0 % 30.0 % 20.0 % 16.1 % 16.7 % 14.6 % 20.3 % 10.0 % 6.6 % 6.1 % 1.6 % 1.6 % 0.0 % Car Bus Train Air Other

14 14 AVIATION TRENDS 2009 Figure 3 Average trip length, km Reasons for travel Most domestic journeys (58 per cent) are made to visit friends and relatives, or for other spare time activities. 18 per cent are business trips; the remaining 24 per cent are for other purposes, such as commuting to and from work. Figures 5 and 6 show how business trips and visiting friends and relatives, respectively, are distributed over the different modes of transport Figure 5 Mode of transport business trips % 40.0 % 39.6 % 0 Car Bus Train Air Other Total 35.0 % 35.4 % 30.0 % Figure 3 shows the average trip lengths for the different modes of transport. As can be seen, air transport carries people over much longer distances than the average (200 km longer). Cars and buses are slightly below the average, with rail just above % 20.0 % 15.0 % 10,0 % 22.1 % Gender distribution Men account for most of the longer journeys, 55 per cent versus 45 per cent for women. Figure 4 shows the distribution of males to females (respectively) who use the different modes of transport for long-distance domestic travel. Men dominate travel by car and air, while women dominate bus and train travel. The largest imbalance is seen in air travel, where about six out of ten journeys are made by men; and bus travel, where six out of ten journeys are made by women. 5.0 % 0.0 % Car 1.8 % Bus Train Air travel dominates domestic business travel over distances longer than 300 km, followed by the car. Trains have a much smaller share, and not surprisingly, business travel by bus is rather unusual. The distribution of journeys to visit friends and relatives or to pursue other spare time activities looks quite different, see Figure 6. The car completely dominates these journeys. Air travel accounts for only 7 per cent. Air 1.1 % Other Figure 4 Mode of transport versus gender Figure 6 Mode of transport, visiting friends and relatives/other spare-time activity % 90.0 % 41.7 % 60.3 % 56.9 % 38.4 % Women Men 80.0 % 70.0 % 70.0 % 80.0 % 60.0 % 70.0 % 60.0 % 50.0 % 58.3 % 61.6 % 50.0 % 40.0 % 40.0 % 39.7 % 43.1 % 30.0 % 30.0 % 20.0 % 20.0 % 15.0 % 10.0 % 10.0 % 7.2 % 7.0 % 0.0 % Car Bus Train Air 0.0 % Car Bus Train Air 0.8 % Other

15 AVIATION TRENDS Socioeconomic group and average income Figure 7 shows the socioeconomic structure for the different modes of transport. Distribution of modes of transport from the Stockholm district The next figure shows the distribution of modes of transport from the Stockholm district to the districts of Västra Götaland, Skåne, and Norr-/Västerbotten (Norrland), respectively. Figure 7 Mode of transport socioeconomic group 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 0.2 % 14.4 % 21.0 % 19.6 % 14.5 % 1.1 % 7.2 % 17.2 % 17.0 % 8.0 % 49.5 % 0.0 % 21.7 % 21.1 % 15.5 % 12.9 % 0.0 % 25.0 % 26.0 % 8.8 % 28.6 % Figure 9 Mode of transport from the Stockholm district 1.9 % 100 % 90 % 21.0 % 80 % 70 % 26.4 % 60 % 50 % 4.9 % 40 % 45.8 % % 36.8 % 25.0 % 4.0 % % 71.3 % 20 % 30.2 % 28.7 % 30 % 10 % 11.3 % 20 % 34.1 % 8.7 % 4.8 % 0 % Car Bus Train Air 10 % 13.8 % Self-employed Worker High-ranking salaried employee/civil servant Unidentified Middle/low-rank salaried employee/civil servant Not working 0 % Sthlm-V. Götaland Sthlm-Skåne Sthlm-Norrland Air Train Bus Car Other Air travel is dominated by salaried employees/civil servants, accounting for 50 per cent of all domestic journeys. For the train the corresponding figure is 43 per cent, with 34 per cent for the car. Bus travel is dominated by the not working group, accounting for almost half of all bus journeys. The socioeconomic structure among the different modes of transport is naturally reflected in the income levels of the users. Figure 8 shows the average individual income for the different transport users. As shown by the figure, air travel is the preferred mode of transport to the northern parts of the country and also to Skåne in the south. For trips to Västra Götaland, the car is preferred, followed by the train; with air travel third. Figure 8 Average annual income 450,000 SEK 400, , , , , , , , , , ,000 50,000 0 Car Bus Train Air

16 16 AVIATION TRENDS 2009 Helen Jakobsson, Håkan Brobeck, focus on domestic ticket prices The price trend in a market provides information concerning what is happening (in financial terms) in that particular market. For example, increased costs normally lead to higher prices, while the establishing of new operators normally has the opposite effect. The price trend in the air transport market is therefore an important part of the Swedish Civil Aviation Authority s market surveillance. Between 1996 and 2003, Statistics Sweden published an index covering business as well as private travel within Sweden, but after 2003 they only published a private travel index. This was the reason why in 2007 the authority started to collect data for a total price index of its own, in which the whole domestic market is reflected; the time has come to publish this index for the first time. market: SAS, Transwede and Malmö Aviation. In Braathens (Norwegian) acquired Transwede and in 1998 they also acquired Malmö Aviation, so by the late 1990s there were only two airlines left (in principle), something which raised the question of how many operators there was room for in the Swedish domestic market. The situation changed, however, in 2004 when two new low-cost carriers, Fly Nordic and FlyMe, entered the scene; however, FlyMe went into liquidation in March 2007 and not long after, Sterling took over many of the routes previously operated by FlyMe. The market development is reflected in the price trend in the market. Since the surveillance started in 1996, ticket prices have shown a steady increase. Towards the end of 2003, just before FlyMe and Fly Nordic entered the market, prices fell sharply. This steep fall is most probably partly due to the increased competition in the domestic market. Figure 1 Statistics Sweden price index, fixed prices, The need to analyze the price trend in the air transport market has grown in pace with the liberalization of this market, and questions regarding competition and price comparison have become increasingly important. At the same time as the need for price surveillance has increased, the pricing system has become more complex, with more operators, an increasing number of ticket categories, increased sales via the internet and prices that vary substantially over time. To make it possible to report on the price trend in an impartial way, the standards of design of statistical data have had to be raised. To improve available price statistics, the authority has started to collect air ticket prices for all domestic routes in Sweden; see the fact box on next page for further information on how the index is calculated. This collecting can be seen as a continuation of the price index for private and business travel published earlier by Statistics Sweden. The price trend since 1996 In the early 1990s the Swedish aviation market was liberalised and ever since there has been competition on a number of routes between two or more operators. In the early and mid 90s there were primarily three operators in the domestic Index January 1996= Jan-96 Jan-97 Jan-98 Jan-99 No total price index for the Swedish domestic market is available for the period The price trend since 2007 The authority s index is applicable from January Fly- Me is not represented in this index, which has the effect that possible price increases caused by the company s prices disappearing from the market cannot be seen in the index. On the other hand the responses of the other companies to FlyMe s exit are reflected. Jan-00 Jan-01 Domestic 2007 Jan-02 Jan-03 Jan-04

17 AVIATION TRENDS According to the authority s index, Swedish domestic prices increased somewhat during the first five months of Prices were lowest during the summer month of July, when the number of business passengers is low. It remains to be confirmed whether this is a seasonal pattern that occurs in the years to come. Figure 2 The Swedish Civil Aviation Authority s domestic ticket price index, fixed prices, 2008 Index: January 2007= FAKTA FACTS How the authority s index is created The total price index is based on the actual prices on all domestic air routes in Sweden. The index is arrived at by the airlines reporting their average prices, together with the number of paying passengers, to the authority. The prices are weighted by the number of passengers Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The authority will continue the collection of price data and the publishing of the statistics every quarter in this publication.

18 18 AVIATION TRENDS 2009 Jean-Marie Skoglund, THE MARKET AFTER DEREGULATION For almost 40 years, SAS and Linjeflyg (as it was then known) had a virtual monopoly in respect of domestic air transport in Sweden. There were a number of regional operators serving the market, but SAS/ Linjeflyg dictated the conditions. In the early 1990s the deregulation of domestic aviation started, consequently changing the domestic market and leading up to the appearance of the innovative air travel organisations we have today. Low-cost carriers are coming and going, but SAS remains today with Skyways as a partner. Civil aviation can be divided basically into two different categories, flying as a mercantile business for remuneration or hire (i.e. commercial air transport/aerial work, etc.) or at the other end of the spectrum, precluding financial implication (i.e. training, leisure, private and sports flying, etc.). For commercial air transport it is necessary to obtain an air operator certificate (AOC) in accordance with EASA regulations and another licence based on which aircraft type the airline uses (there are two licences, the dividing line being a maximum take-off weight of 10 tonnes or a passenger capacity of 20 seats). At the time of writing there are 61 commercial operators, 19 of which operate large aircraft types and 42 using the smaller types. Despite a reduction in passenger numbers since 1990, the number of airlines has not fallen significantly in fact, not only has there been an increase in the number of airlines entering the market, but also in the number exiting the market. Table 1 Classification of domestic airlines. The table shows the number of passengers, destinations, and turnover for 2008 Airlines with domestic and int. route networks Airlines with domestic route networks Airline Owner structure No. of passengers No. of destinations served in Sweden 1 Airplane type SAS Sverige AB 100 % SAS Group 3,100, B-737/600/800 MD-81/82 Skyways 75 % Salenia 690, F % SAS Niche airlines Malmö Aviation City Airlines 100 % Braathens Aviation 100 % Investment AB Janus 1,100,000 29, AVRO RJ-100 ERJ-135/145 Low-cost carriers Norwegian 100 % Norwegian Air Shuttle 709,000 Sterling 4 247, B-737/800, MD-83/83 B-737/500/700/800 Jetstream J32 Jetstream J32 SAAB 2000/340 SAAB 340 Beechcraft 1900 ATP Jetstream 61 Regional airlines Barents AirLink Direktflyg Golden Air Nextjet Privately owned 100 % Salenia 100 % Thun-koncernen Privately owned 3,700 37, , ,600 Tour organisations Gotlandsflyg Kullaflyg AB Sundsvallsflyg AB Blekingeflyg AB Kalmarflyg AB Flysmaland AB Östersundsflyg 100 % Sverigeflyg Holding AB 92 % Sverigeflyg Holding AB 78 % Sverigeflyg Holding AB 75 % Sverigeflyg Holding AB 63 % Sverigeflyg Holding AB 52 % Sverigeflyg Holding AB 88 % Sverigeflyg Holding AB F-50 2 SAAB SAAB Other airlines HögaKustenflyg AB Avitrans Transwede Airways Air Express 5 86 % Local business 14 % Kalmarplanet 100 % Sverigeflyg Holding AB 100 % Braathens Aviation 100 % Salenia 339,000 SAAB 340 AVRO RJ-100 F-100, SAAB Scheduled services only. Several airlines and tour organisations carry out seasonal traffic. 2 Tour organisations operate with these aeroplanes on lease from Skyways, Golden Air and Avitrans. 3 The statistics include passengers for those tour organisations who lease aeroplanes from Golden Air. Passenger statistics for tour organisations are missing, since the statistics cover those airlines which serve the route. 4 Sterling goes into liquidation on 29 October. 5 MC Airlines aquired Air Express in May 2009.

19 AVIATION TRENDS Today we see a new type of airline in the form of air travel organisations, and those that do not carry their own traffic, but function more as suppliers of capacity rather than traditional airlines. The Swedish aviation market is completely different today from that of years ago. The structure of Swedish airlines Before deregulation in 1992, the air transport market consisted of a number of operators that could be divided into two categories. The first one was SAS/Linjeflyg and Swedair, which enjoyed a dominating position in the market. The second consisted of regional airlines serving domestic routes between those destinations which SAS/Linjeflyg and Swedair chose not to serve. Their operations were dependent on access to SAS/Linjeflyg s route network. When Transwede, together with Malmö Aviation and Nordic European (NEA) applied for an AOC to carry out domestic operations with heavy jet airliners, this triggered the deregulation of domestic aviation. Only Malmö Aviation currently remains in the market; Transwede was acquired by Braathens of Norway which, in turn, left the Swedish market, and NEA went into liquidation in The current structure of the Swedish domestic airlines is characterised by pluralism, with different types of airline. Table 1 above shows their classification. One of the airlines currently offering both a domestic and an international route network is SAS, whose domestic network covers 14 destinations; before deregulation that figure was 5. When SAS acquired Linjeflyg the number of domestic routes increased. During 1993 SAS executed a reorganisation programme resulting in a reduction of domestic operations by 14 per cent and a productivity drop of 20 per cent compared with the previous year. Several routes were abandoned between 1993 and From 1992 to 2001, SAS experienced a sharp drop in private domestic air travel while business travel increased. The drop was, to a very large extent, explained by the introduction of VAT on domestic travel, something which affected private travel profoundly. Business travel also experienced a drop after 2001, thereby breaking the positive trend with a high yield for SAS domestic operations. The drop in business travellers can be attributed to the increasing competition from other airlines and the introduction of high speed trains. In the early 2000s low cost operator Goodjet started serving Göteborg and Malmö from Stockholm-Arlanda Airport, which increased price awareness among business travellers too. Figure 1 Number of passengers SAS domestic operations, Millions Source: Travelutions AB